Deal Volume Suffers 36% Y-O-Y Drop

CBRE Group’s sale of its headquarters at 400 S. Hope St. in Los Angeles was one of May’s largest office deals; sales in the sector were up 4% from a year ago.

NEW YORK CITY—The top-line figure is unsettling: May deal volume for significant US commercial property sales declined 36% from the year-ago period, Real Capital Analytics reported Thursday. Numbers like these have led some industry members to anticipate a market correction; however, RCA’s latest US Capital Trends Report notes that “while challenges are ahead, this cycle does not need to end like the last.”

Additionally, RCA points out that in comparing May’s figure of $28.6 billion to transaction volume in May of 2015, it’s important to remember that the first half of last year was marked by an elevated pace of portfolio and entity-level deals. Such transactions were up 58% in H1 ‘15 from the year prior, representing a hurdle that was “simply too high to clear” for the current year’s numbers to match last year’s. May’s volume of mega-deals, $6.5 billion, was off 56% by comparison to the year-ago period.